Baseball boss starts security firm with politicos

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Andrew Becker, Center for Investigative Reporting

The chairman of the Chicago White Sox and Bulls is going into the global security business with an eclectic and controversial group of partners tied to the Obama administration, documents and interviews show.

According to incorporation records filed in Arizona, the former director of the U.S. Secret Service, the former U.S. attorney for Arizona and the ex-chief of staff to Secretary of Homeland Security Janet Napolitano have joined forces with Jerry Reinsdorf. A fifth partner is a prominent Arizona lobbyist and former GOP lawmaker.

Reinsdorf, 77, has surrounded himself in the new venture with a cast of former high-level government officials and political insiders, some of whom have had their own brushes with scandal and controversy. The melding of deep pockets, personal connections and powerful lobbying signals lucrative opportunities in the fast-growing global security industry. The venture highlights the shift toward international markets for government consultants and contractors amid an uncertain landscape for the U.S. federal budget.

Reinsdorf and his four partners each have a 20 percent stake in a new limited liability company called SRB2K, according to articles of organization filed last month with the Arizona Corporation Commission. The company is using the name Global Security and Intelligence Strategies as a “placeholder,” said Len Sanderson, a Washington-based spokesman for Reinsdorf.

Sanderson said that the partners may be discussing which markets the company would target, but that it would have an international interest. He emphasized the business is still in the early planning stages, but Reinsdorf and his partners wanted to stake their claim in the area.

“Most of this right now is about relationships and friendships and the belief they have in each other,” he said. “They’re not near to opening the doors. They’ve known each other a long time. They like each other. They trust each other. They’re just figuring out” what the business is going to do.

Based for now in the Phoenix area, where Reinsdorf has spent parts of the year living and the White Sox hold spring training, the company draws on three Arizona political operatives with years of experience in state and national politics and government as well as the man who was in charge of protecting two presidents and other government leaders.

Mark Sullivan retired last month as the director of the Secret Service after 30 years with the agency, which is part of the Department of Homeland Security. In nearly seven years at the helm, he presided over two scandals, including uninvited White House gate-crashers who sneaked past security into a 2009 state dinner and 13 agents who paid prostitutes to visit them in their Cartagena, Colombia, hotel rooms ahead of President Barack Obama’s visit to the country last year.

The Arizona personalities, who in their different ways have long ties to Napolitano, the Homeland Security leader, include Noah Kroloff, who left his post in recent weeks as the secretary’s chief of staff, and Dennis Burke, another former Napolitano adviser.

Kroloff, who first went to work for Napolitano when in law school at Arizona State University, earned a reputation in Arizona and Washington as a bare-knuckle political brawler, but a fierce supporter of his boss.

Burke, who worked as a federal prosecutor during Napolitano’s tenure as the U.S. attorney for Arizona, was in that position himself when the Alcohol, Tobacco, Firearms and Explosives agency's failed effort to track guns flowing between the U.S. and Mexico, known as Operation Fast and Furious, spun out of control when agents lost track of hundreds of guns. Under pressure, Burke, who also served as Napolitano’s chief of staff when she was Arizona’s governor, resigned as the U.S. attorney in 2011, clouding his political future.

David Waid, who was chairman of the Arizona Democratic Party when Napolitano was governor, said Burke’s return to the public sphere may not necessarily be a step back on the political track, but the new enterprise would help establish him in the business and security worlds.

If he were to run for higher office, Burke would have “his detractors over Fast and Furious,” Waid said. He would “also have a whole lot of boosters in this state.”

Reinsdorf met the Napolitano aides when they worked in the governor’s office, said Waid, a former deputy chief of staff to longtime New York State Assembly Speaker Sheldon Silver, whom Kroloff worked for earlier in his career.

Sanderson said he did not know whose idea it was to start the company.

The fifth partner is listed as P3 LLC, which is run by John Kaites, a top Arizona lobbyist and former Republican state lawmaker. He previously teamed up with Reinsdorf in a bid to buy Arizona’s cash-strapped NHL franchise, the Phoenix Coyotes. Kaites also ran for the state’s attorney general as a Republican candidate in a race that Napolitano won in 1998, her first elected public office.

Kaites’ firm, Public Policy Partners, also lobbies for Major League Baseball teams such as the Oakland Athletics as well as Fortune 500 company Sempra Energy and The Geo Group, a private prison and immigration detention company, according to the Arizona Secretary of State website.

“Politics makes strange bedfellows,” Waid said. “It’s an eclectic and effective group. They are all people who have shown an ability to effectively tackle issues and make a difference.”

Calls to Kaites and the attorney representing the company were not returned. Reinsdorf did not return calls to his office at U.S. Cellular Field in Chicago. Kroloff, Sullivan and Burke could not be reached for comment.

This story was produced by the nonprofit Center for Investigative Reporting. Learn more at cironline.org. Contact the reporter at abecker@cironline.org.